i don't know if you need to do anything special, i never tried to compile the plugin. you should probably get some basic projects running (to make sure you understand how you have to set up a project and its modules in idea) before trying to compile something more complex

since you admitted to be a total newbie: are you sure you want to COMPILE the plugin, or do you want to compile scala code USING the plugin?

What I really want is to use the plugin to compile scala code for scala 2.8.0 beta 1. However, as far as I have been able to figure out I have to compile the plugin myself to be able to use it with 2.8.

It's a Usability bug. Choose anything, check flag to not download anything, then create your project. Then you can configure your scala 2.8 development with your own scala-compiler.jar and scala-library.jar.

You can find in tomorrow nightly that 2.8.0.Beta1 added to version list. Moreover fixed bug about compiler configuration. So if you use this project dialog to create new project and you choose some compiler version, then you can be sure that this compiler will be used in your module.